In December, the $10.7bn fund completed plans to hire six hedge fund managers by the end of 2009, with the appointment of Claren Road and Paulson & Co. The fund’s diversification into the space will now continue into 2010, according to Jason Goeller, the investment officer responsible for hedge funds.

“The board approved a new allocation to Samlyn Capital just this week,” said Goeller. NMPERA allocated $20m to Samlyn, a hedge fund that is only open to investment semi-annually. “And our investment consultant Cliffwater will be bringing additional managers in the event-driven space to the board’s consideration in the coming weeks,” he added.
NMPERA’s investment committee met at the beginning of December to approve allocations of $20m to Claren Road, a long/short credit-focused hedge fund for the pension’s Portable Alpha Programme; $20m to Paulson, an event driven hedge fund, for the Portable Alpha Programme; as well as another $25m to Paulson for NMPERA’s Absolute Return Portfolio. The managers will be funded by 1 February, said Goeller.

The investments are part of New Mexico’s broader plan to make more direct investments in hedge funds. NMPERA hired Brevan Howard Asset Management, Eton Park Capital Management, Diamondback Advisors, Taconic and Anchorage Capital in the past six months with allocations of around $25m - $35m each.

Last month, the committee decided to award additional allocations to Brevan Howard and Eton Park, ($20m and $25m respectively), in order to increase its portable alpha programme.

The managers were recommended by the pension’s hedge fund consultant, Cliffwater. As at the end of November 2009, the Absolute Return Portfolio had $701m invested in hedge funds and the Portable Alpha portfolio, $452m. NMPERA’s hedge fund target is 7.5% of the investment portfolio, however, this will “depend on the style and risk return characteristics of each individual manager,” Goeller added.